The total monthly seasonally adjusted annual rate (SAAR) of housing starts for all areas in Canada increased 16% in July (279,509 units) compared to June (241,643), according to a report released Friday by Canada Mortgage and Housing Corporation (CMHC).
The six-month trend in housing starts increased 3.2% from 247,840 units in June to 255,783 units in July. The trend measure is a six-month moving average of the SAAR of total housing starts for all areas in Canada, said the federal agency.
Curtis Adams
In Canadian urban centres with a population of 10,000 or greater, there have been 132,823 actual housing starts year-to-date (January – July) in 2024. This compares to 123,593 for the same time period in 2023, meaning actual housing starts are currently 7.5% higher in 2024, said the CMHC.
“Both the SAAR and Trend of housing starts increased in July. This was due to growth in actual year-over-year starts, driven by higher multi-unit starts, particularly in Calgary and Ottawa. As the national housing shortage continues, developers remain focused on multi-unit construction in Canada’s major centres.” said Bob Dugan, CMHC’s Chief Economist.
Key Facts:
- The monthly SAAR of total urban (centres 10,000 population and over) housing starts was 17% higher at 261,134 units recorded. Multi-unit urban starts increased 21% to 217,306 units, while single-detached urban starts increased 2% to 43,828 units.
- The rural starts monthly SAAR estimate was 18,375 units.
- Actual year-to-date housing starts between January and July 2024 are up 47% in Montreal from the same period last year, showing some recovery from a historically low year for new home construction in 2023. In Vancouver, actual starts are down 18% in 2024 compared to 2023, but it’s important to note that 2023 was a record year for new home construction in the region. In Toronto, actual year-to-date housing starts are down 9.5% when compared to the same period in 2023.
Maria Solovieva, Economist with TD Economics, said builders broke ground on a larger-than-expected number of units in July, with Ontario recording the best month in over a year.
“With starts exceeding the Q2 average of 230k units, today’s reading sets a solid foundation for the third quarter, pointing to a positive contribution to overall economic growth via the new construction component of residential investment,” she said.
Despite the rebound, housing starts remain below the multi-decade highs observed in 2021 and 2022, particularly in single and semi-detached units. We expect multi-family units to soon contribute to this decline, given weak pre-sale activity in recent years and elevated borrowing and construction costs.
Robert Kavcic, Senior Economist with BMOC Capital Markets, said residential construction activity remains sturdy in Canada despite the clear slowdown in the resale market.
“The fact that such a cyclical component of the economy hasn’t buckled under sharply higher borrowing costs suggests that the more structural forces still at play are outweighing some pockets of weakness,” he said.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list. He was also named by RETHINK to its global list of Top Retail Experts 2024.
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